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To: Dave Hanson who wrote (5791)	2/3/1999 5:20:00 PM
From: Dave Hanson	Read Replies (1) \| Respond to of 14778

briefing.com on Onsale.com and buy.com Excerpts from 2/3 stock briefing: "Briefing.com commentary: ONSALE's move, announced just two weeks ago, to sell items at cost at first seemed like a desperate act, viewed as a reaction to EBay. However, ONSALE now has to be watched as a leading indicator of trends on the Internet, because if successful, it may change the entire nature of retailing. The Internet's primary virtue is leverage, particularly for retail products. Once you have built a web site, represented as fixed costs, incremental sales cost nothing. Traditional sales margins were percentage based because there was (is) incremental cost to producing or storing additional product. If ONSALE succeeds at selling AT-COST, will it force Amazon.com to sell any book at cost plus a buck? Will Internet based retailing move to the transaction model? "For any industry where leverage can be achieved by the internet, fee based retailing may be possible. If a $60 shirt can be sold just as easily as a $20 shirt, do you need to make $20 profit on the first, and only $7 on the latter? If you can sell the $60 shirt for $40 plus $2, you will sell more. Fee based transaction retailing is so radically different from traditional retailing, ONSALE (and BUY.COM) need to watched closely as leaders. If they can profitably survive, the pricing pressure on other retailers may be enormous. We haven't liked ONSALE that much in the past, (primarily because they took title and inventoried half of the auction items), but ONSALE now has to be on everyone's watch list. Not necessarily as an investment, but as a litmus test for the entirely new realm of internet retailing."